CUB 66395

GUY GOULARD, Umpire

The claimant worked for Bruce Packers Limited from April 22, 1985 until October 31, 2003. He applied for employment insurance benefits on November 3, 2003 and an initial claim was established effective November 2, 2003. At the termination of his employment, the claimant was paid vacation pay in the amount of $746.00. On December 14, 2004, the claimant received a retirement payment in a settlement of a complaint against his employer in the amount of $7,500.00. The Commission determined that the amounts received by the claimant represented earnings from employment which were allocated from November 2, 2003 to the week of January 31, 2004. This decision resulted in an overpayment of $2,732.00. The claimant's benefit period had been extended by 14 weeks.

The claimant appealed the Commission's decision to a Board of Referees which dismissed his appeal. He appealed the Board's decision. This appeal was heard in Barrie, Ontario on July 19, 2006. The claimant was present.

Before the Board as well as before me, the claimant submitted that his employment with Bruce Packers was not terminated until April 2004 when the employer determined that the business would close permanently. He argued that, before that date, he was simply on a temporary lay-off due to a fire at the plant. The employer confirmed that, when the plant was closed due to the fire, some of the employees had been told the employer would try to have the plant reopened but this had not been possible. No expected recall date had been indicated on the record of employment.

Subsection 36(9), (10) and (11) of the Employment Insurance Act provides as follows:

(9) Subject to subsections (10) and (11), all earnings paid or payable to a claimant by reason of a lay-off or separation from an employment shall, regardless of the nature of the earnings or the period in respect of which the earnings are purported to be paid or payable, be allocated to a number of weeks that begins with the week of the lay-off or separation in such a manner that the total earnings of the claimant from that employment are, in each consecutive week except the last, equal to the claimant's normal weekly earnings from that employment.

(10) Subject to subsection (11), where earnings are paid or payable to a claimant by reason of a lay-off or separation from an employment subsequent to an allocation under subsection (9) in respect of that lay-off or separation, the subsequent earnings shall be added to the earnings that were allocated and, regardless of the nature of the subsequent earnings or the period in respect of which they are purported to be paid or payable, a revised allocation shall be made in accordance with subsection (9) on the basis of that total.

(11) Where earnings are paid or payable in respect of an employment pursuant to a labour arbitration award or the judgment of a tribunal, or as a settlement of an issue that might otherwise have been determined by a labour arbitration award or the judgment of a tribunal, and the earnings are awarded in respect of specific weeks as a result of a finding or admission that disciplinary action was warranted, the earnings shall be allocated to a number of consecutive weeks, beginning with the first week in respect of which the earnings are awarded, in such a manner that the total earnings of the claimant from that employment are, in each week except the last week, equal to the claimant's normal weekly earnings from that employment.

In this case the claimant had received his vacation pay following his lay-off. The claimant had been led to believe he could be recalled. The record of employment did not indicate the claimant would not be returning but simply revealed the recall date was unknown. Following the final severance of the employment and a complaint to the Ministry of Labour, the employer agreed to pay a severance pay.

The facts in this case are practically identical to those in CUB 41594, where Justice Rouleau wrote:

"I agree that the Commission was right to allocate the sum of $401.13 vacation pay that the claimant received when his employment was temporarily terminated on June 4, 1997. However, under section 36(9) of the Regulations, the lump sum that he received after August 20 should have been allocated as of that date since the amount did not become payable before August 20, 1997.

The Board of Referees thus made an error in law and I order that the amount received as severance pay be allocated as of the date of the official closing of the Bombardier plant at Valcourt, that is August 1997."

In the present case, had the employer been able to re-open its plant, the claimant would likely not, on the basis of his lay-off, have been entitled to the severance pay that was eventually negotiated. This payment was a result of the permanent closing of the plant.

I adopt the reasons given by Justice Rouleau in CUB 41594 and find that the Board erred in law in deciding that the severance moneys the claimant received were to be allocated from the date of his lay-off as the allocation should have been from the time of the permanent closing of the plant in April 2004.

Accordingly, the Board's decision is set aside and the claimant's appeal is allowed. The matter is returned to the Commission for the determination of the overpayment, if any, that would result from the allocation of the severance payment starting on or about April 15, 2004.

Guy Goulard

UMPIRE

OTTAWA, Ontario
July 28, 2006